Your company may be downsizing, restructuring, or eliminating a few positions. Employees will lose their jobs. Severance agreements offer hardworking employees some benefits to tide them over until they begin a new position.
With guidance from a skilled attorney, well-drafted severance agreements can help prevent future lawsuits. Discharged employees may try to sue, claiming wrongful termination after having second thoughts and believing they were targeted for dismissal because of discrimination or favoritism. Consult a Johns Creek severance agreements lawyer for assistance drafting your company’s documents.
Severance agreements are contracts governed by Georgia and federal law. Standard provisions in severance agreements include:
These provisions are not exhaustive. A Johns Creek attorney can discuss a client’s goals, purpose, working environment, and types of employees who might best be subject to severance agreements.
Severance agreements are commonly used for middle and upper management. Employers who fear former employees will share secrets with competitors may benefit from inserting clauses restricting employees’ choice about where to work next, called a restrictive covenant.
Georgia Code Section 13-8-53 allows employers to restrict competition from departing employees. The restrictions must be for a limited time and a small geographic area. For instance, forbidding employment within a twenty-mile radius for two years would probably pass in court, whereas forbidding employment in the Southeast US for fifteen years probably would not. Employers can also restrict former employees from soliciting old customers for a limited time.
The Age Discrimination in Employment Act (ADEA) is federal law that governs how employers must treat workers over 40. If the rules are violated, including how settlement agreements are handled, older workers can file lawsuits for age discrimination.
When drafting a severance agreement for an older worker, a skilled lawyer should help write the terms so the employee understands it. Clarity includes stating the benefits an employee will receive for giving up certain rights (including continued employment) and that the employee is not waiving future rights. Language should extend a certain amount of time for the employee to review the agreement with a lawyer, and the employee should be encouraged to consult one.
Additional ADEA rules apply if the employer is terminating more than one older employee. A local attorney could help ensure a client’s severance agreement complies with federal and state laws.
Most businesses go through growing pains that can include downsizing and layoffs for good employees asked to leave through no fault of their own. Offering a benefits package will go a long way in how they remember you. You are also heading off future problems because, in exchange for benefits, departing employees must give up some rights, such as the right to sue.
A Johns Creek severance agreements lawyer is here to help when you must let employees go. Call the legal team at Sparks Law for a consultation today.